You sell a 50 put for 4 and buy a 55 call for 5. Stock ends at $47. Profit=............

Q: Consider long positions on options written on the same underlying stock. Option 1 is a call on 100…

A:

Q: Suppose TRF = 5%, TM12%, and b = 2, what is r, the required rate of return on Stock i? 12% 7% 19% 5%…

A: According to Capital Asset Pricing model ,Ri = Rf + [b * (Rm-Rf) ]whereRi = Required rate of return…

Q: You purchase a call with a strike of K-22 at a premium of 1.73 and you purchase a put with a strike…

A: Profit on Call option= Max(St-K,0)-Premium=Max(15.31-22,0)-1.73=-1.73Profit on Put Option=…

Q: Suppose that the last sale of Company X stock was at a price of $50. Further suppose that an…

A: Given: Variables in the question            Market A                  Market B     # shares…

Q: Answer the following as indicated. (Format: problem, then, solution) 6. Calculate the dividends paid…

A: The question is related to Dividends. Dividend paid is calculated with the help of following…

Q: Suppose that call options on a stock with strike prices $100 and $106 cost $8 and 55, respectively.…

A: Call options are defined as the financial contracts, which provides the option the purchaser the…

Q: A stock has had the following year-end prices and dividends: Year Price Dividend $ 1 43.27 23456 2…

A: Returns refer to the income earned by the investor through an investment in a particular holding…

Q: Assume that an investor buys 250 shares of stock at $33.78 per share, putting up a 45% mar a. What…

A: A margin account refers to a brokerage account where securities are bought by paying only a portion…

Q: Magnesium Corporation has a policy of retaining 75% of its income. The growth rate of the company…

A: " Hi, Thanks for the Question. Since you asked multiple sub parts question, we will answer first…

Q: Calculate Expected return and standard deviation of returns if the investor purchases the stock at…

A: The expected return and standard deviation are two statistical measures that can be used to analyze…

Q: LUCELEC’s preferred shares pay a dividend of $4.50. What is the value of the stock if your required…

A: Preferred stock means the amount raised against which dividend is given to stock holder but after…

Q: Given the following information concerning three stocks, Stock Price Shares Outstanding A $10…

A: We are given the following data -Stock PriceShares OutstandingA$101,000,000 B$143,000,000…

Q: Figure out the payoff and the profit per share. You sell a 46 call for 4. Stock ends at 545. Profit…

A: A call option seller has the obligation to sell the underlying asset (share) when the call option…

Q: You sell a 55 call for 4. Stock ends at $61. Profit=..........

A: The strike price of the Call is 55 Call Premium is 4 The ending price is $61 To Find: Net profit

Q: Calculate the Expected return, Risk Measure, and Relative risk.

A: Expected return is the rate of return that an investor expects from a stock or company in exchange…

Q: Calculate the value of preferred stock given: Dividend Payment (D) is $10 and Capitalization Rate…

A: Value of Preferred stock = Dividend payment / Capitalisation Rate

Q: Question 1 Consider the three stocks in the following table. P, represents price at time t, and Q,…

A: The rate of return refers to the minimum return earned by the investor while investing in the stocks…

Q: You are given the returns for the following three stocks: Stock B Stock C 3% -23% 9 37 8 11 4 11…

A: Arithmetic return refers to the method used for calculating the mean or average of the various…

Q: You have the following share price of XYZ.   DATE Price 2-Mar-2021 $100 3-Mar-2021 $60…

A: Geometric average rate of return will be calculated considering return in each period. Following is…

Q: An investor purchases a stock for $47 and a put for $0.95 with a strike price of $45. The investor…

A: Maximum profit is the difference between the strike price of the call sold and the purchase…

Q: The current market price of a share of a stock is $58.33. Both call and put options on this stock…

A: Current market price = $58.33 Strike price = $70

Q: 1. If the required rate of return is 5 percent and the stock pays a fixed S5 dividend, its value is…

A: Value of stock = Dividend / Required Rate of return Value of stock = 5 / 5% Value of stock =100…

Q: b. Construct the balance sheet that corresponds to the transaction described in requirement a.…

A: Initial margin is the margin which is given initially, It is the percent of the purchase price that…

Q: If the payout ratio 0.40 and net income is 100 than the stock price is Select one: Ⓒa. 40 b. 60 C.…

A: We need to use constant growth  model to calculate stock priceStock price = D0*(1+g)/(Ke-g) Where D0…

Q: You sell a 50 put for 4. Stock ends at $47. Premium=..........

A: The going rate for an option contract is known as the option premium. In other words, it is the…

Q: You calculated the value of a stock to be $108.  The stock pays a dividend of $7.6. What is the most…

A: A stock represents a share of ownership in a publicly-traded company. value of stock = $108 Dividend…

Q: You purchased 100 shares of common stock on margin at $55 per share. Assume that the nitial margin…

A: Share trading in stock market is done on the basis of margins. Initial margin is amount of money…

Q: Determine the cost of common stock (equity). The T-Bill rate is 5.2%. The Market Return is 12.7%.…

A: Market Return = 12.7%Beta = 1.27T-Bill Rate = Risk Free Rate = 5.2% ExplanationWe calculate the Cost…

Q: D1 = $0.75, rs = 10.5%, g = 6.4%.  Calculate the stock price. $18.39 $18.84 $18.29 $17.75

A: P0 =D1 /(ke-g)

Q: Consider: (a) Stock trades for $100; (b) Calls with exercise prices of $90, $100, and $110 trade at…

A: A call option refers to a derivative instrument that provides its holder the choice to buy the…

Q: 4. At the beginning of the year, you purchase a share of stock for $50. Over the year the dividend…

A: Dividend discount model is a model which considers the discounted value of future dividends to…

Q: If D1 = $1.75, g (which is constant) = 5%, and P0 = $50, what is the stock's expected total return…

A: Given information: Dividend for next year (D1) is $1.75 Growth rate is 5% Current year price (P0) is…

Q: An investor purchases a stock for $38 and a put for $.50 with a strike price of $35. The investor…

A: In a collar Option strategy , the following transactions are executed to limit the Profit and…

Q: Assume a stock pays a perpetual dividend of 2 dollars, has a required rate of return of 9%, a…

A: Liquidity-based asset pricing empirically explains: the cross-section of stock earnings; how less…

Q: An investor short sells 100 shares of a stock for 69.07 per share. The initial margin is 50%​, and…

A: A demand for additional funds or securities to be deposited into an investor's or trader's margin…

Q: You calculated that stocks A and B are worth $50.  A currently sells for $49 and B currently sells…

A: An under valued stock is one that has market value lower than its fundamental value.

Q: P7.1 Assume you are given the following abbreviated financial statement. چیزا مرگ دخل Current assets…

A: There are different types of ratio like liquidity,Activity ,leverage and profitability ratio…

Q: Suppose that put options on a stock with strike prices $30 and $35 cost $4 and $7, respectively.…

A: The bull spread would use a strike price of $35 and cost C1 $7 by writing put option and buy put…

Q: Stock A B 1. Consider the following market of 3 stocks: IC Po $11 $54 $149 Qo 40 80 50 P₁ $17 $20…

A: An equal weight index is a stock index that gives equal weight to all stocks regardless of market…

Q: ing for $30.00 a share. What is the gain or loss on the following transactions? Use a minus sign to…

A: Long position means that when prices when increase from the current position and short position is…

Q: Graph all the possible profit outcomes (for all possible STs) of a long put held until expiration if…

A: To graph all the possible profit outcomes of a long put, we need to consider different stock prices…

Q: The Price-Earning ratio (P/E) of stock  A, B, C are 5, 3, 7 respectively. Which one you should buy?

A: A Price-earnings ratio is the relationship between firm's stock price and earnings per share. The…

Q: Ultra Petroleum (UPL) has earnings per share of $1.37 and a P/E ratio of 32.56. What's the stock…

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Q: An investor purchases a call for CL0 = $3.00 with a strike of X = $40 and sells a call for CH0 =…

A: A bull call spread is an options trading strategy that involves buying a call option with a lower…

Q: Stock A sells for $40.00, Stock B for $50.00 and Stock C for $30.00. Stock C splits three for one.…

A: New divisor or the new number of shares to compute the price weighted average:Price average before…

Q: You own a stock worth $100. A put has a strike price of $90 and a premium of $8. A Call has as…

A: Collar strategy is created by holding an underlying stock, buying an out of the money put option,…